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Air Baltic weighs investor options after performance improves

BRUSSELS, March 6 (Reuters) - Latvia’s Air Baltic sees less pressure to find a new investor quickly, after its financial performance improved over the last year, its chief executive said on Tuesday.

The Latvian government, which owns 80 percent of the carrier, had aimed to find a new investor by the end of last year but the process is still ongoing, Martin Gauss told Reuters on the sidelines of an Airlines For Europe conference in Brussels.

“What has changed ... is that our performance has significantly improved. That enables us to do things on our own that initially we thought we could only do if we get new investors in,” he said, adding that 2018 had also started well.

He added that the government could still decide to do a transaction now or take more time over the search for a partner.

Executives at Europe’s major airlines earlier on Tuesday said they expected more consolidation in Europe after a turbulent 2017 saw the collapse of Air Berlin and Monarch.

“The poor performers are disappearing. We’re seeing airlines fail in the way they should fail,” IAG boss Willie Walsh said.

Air Baltic’s Gauss said he believed airlines needed to be a certain size to stay independent and that he saw several options for Air Baltic in the future.

“I see our future being a stronger airline, having a stronger part of the market and then, depending on who is interested, becoming part of a bigger group or being able to merge ourselves with somebody and be something bigger,” he said.

Air Baltic recently set up its own academy to train cadet pilots, in light of concerns over recruitment. Gauss said Air Baltic had also increased pilot salaries, like rivals, but it wanted to also employ local pilots who are more likely to stay.

“It takes away some of the pain of attracting pilots to come to us,” Gauss said, highlighting that a Spanish pilot might wish to return home at some point.

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